Great article Soham! Could you please elaborate on this para a bit more- ''The only way fintechs, like Freo, Instant Pay and Razorpay X can make money is by lending. So they enter into an agreement with their partner banks to be offered a line of credit of up to 80% of the mobilized savings at a facility fee of 3%. In turn, the fintechs lend to their customers at 18-20%. They pocket 15-18% of the spread, after paying the facility fee.''
1) How is the spread 15-18%?
2) What do you mean by mobilized savings, are these the deopsits that are brought in by fintechs for Partner banks?
3) And the line of credit is offered by partner banks for 80% of these deposits fintechs bring in at just 3%?
Could you please state an example for the above? Perhaps some fintech who models its business like this?
Great article Soham! Could you please elaborate on this para a bit more- ''The only way fintechs, like Freo, Instant Pay and Razorpay X can make money is by lending. So they enter into an agreement with their partner banks to be offered a line of credit of up to 80% of the mobilized savings at a facility fee of 3%. In turn, the fintechs lend to their customers at 18-20%. They pocket 15-18% of the spread, after paying the facility fee.''
1) How is the spread 15-18%?
2) What do you mean by mobilized savings, are these the deopsits that are brought in by fintechs for Partner banks?
3) And the line of credit is offered by partner banks for 80% of these deposits fintechs bring in at just 3%?
Could you please state an example for the above? Perhaps some fintech who models its business like this?
Best,
Pankaj